Initial Setup of Your Situation

The following describes two things:

  1. A rough outline of the Initial Intake Zoom Meeting when you hire us to do a Your Initial Real Estate Financial Plan™ Consultation, and
  2. How we recommend you go about setting up your initial situation in the Real Estate Financial Planner™ software if you're doing it yourself

Time Estimate

If you were to hire us, for a typical person with a reasonable number of  Accounts,  Properties and  Rules, the initial intake call will take about an hour.

If your situation is complex or you're doing it yourself and learning as you go, expect it to take longer.

Need Just a Little Help? If you don't feel you need to hire us to do the full Your Initial Real Estate Financial Plan™ Consultation but you'd like a little help, you can also purchase premium paid support.

Setup Accounts First

Since  Properties and  Rules will reference  Accounts, we typically start by adding your  Accounts first.

 Accounts are places you store money.
Pro Tip: There is a delicate balance between having too many  Accounts and having to use  Rules to constantly shift money between  Accounts and having fewer  Accounts than what you may have in real-life.

I recommend you have  Accounts for money that behaves similarly and is invested in similar things.

In general, you want to make sure you setup accounts for:

  • General Checking/Savings Account – Where you pull living expenses and deposit your paychecks, other income and expenses (including rents and property expenses).
  • Retirement Accounts – Accounts for your IRA, 4301K or other retirement money. I'll often label this as an  All-In-One or  Primary.
  • Investment Accounts – Accounts for your investment accounts that are not retirement accounts. For simplified modeling, many folks will choose to group this with their General Checking/Savings Account.
The system will automatically include a special  Account called the  Default Cash Account. This is a special  Account that is typically used to show where you needed to needed to add money to your plan or when another  Account you had ran out of money while running your  Scenario.
For more information, check out How to Add an Account.

Later, when we test the impact of changing our assumptions and plans, we might come back and create additional  Accounts with different characteristics. Don't both with that during this first pass as we're just trying to capture the  Baseline Scenario.

Add Properties Next

 Properties are single family homes, duplexes, triplexes, fourplexes, apartments, commercial buildings, industrial buildings and other income producing property you might own. It also includes the home(s) you live in. Or, for Nomads™, it might be  Properties you live in that eventually become rentals.

Once you've added your  Accounts, you should add your  Properties next.

I recommend you start with the  Properties you Already Own first.

Pro Tip: I find it easier to add the first  Property then make a copy of that  Property and just edit the copy to add the next one.

When adding additional  Properties copy the most similar and then edit the copy to minimize data entry.

See How to Create a Copy of a Property more details on how to copy a  Property.

Be sure to add:

  • All  Properties you already own, Already Owned
  • Templates of  Properties the types of  Properties you plan to buy in the future using  Rules. We call these Dynamic  Properties.
For more information, check out How to Add a Property.

Create Scenario Next

 Scenarios are a way to group specific  Accounts and  Properties together with a plan or strategy you might consider implementing. The plan or strategy is “defined” with  Rules (which we will get to… eventually… below).

Once you have added all your  Accounts and all your  Properties, we'll create a  Scenario next.

For the first  Scenario, I typically name it “Baseline” or something like that to show that it is our starting or default  Scenario.

For more information, check out How to Add a Scenario.

IMPORTANT: Once you've created the  Scenario you will want to add/associate your  Accounts to the  Scenario. This tells the software to include that particular  Account with that  Scenario. See How to Add an Account to a Scenario for more information. You'll want to do that for each  Account you want included with this  Scenario.

You'll want to do the same thing with  Properties. Add/associate them with this  Scenario.

Check out How to Add or Remove a Property from a Scenario for info on how to do this.

Finally, Let's Add Rules

 Rules are where the magic happens.

 Rules manipulate  Accounts and  Properties (and sometimes even the  Scenario itself).

 Rules “program” what you are doing with the  Scenario and so this is, by far, the most complex part of the entire setup.

For more information, check out How to Add a Rule.

Here are the  Rules you may need to add and the order I typically add them:

  • Current living expenses
  • Current job income for you and spouse
  • One-time or regular bonuses
  • Social security income for you and spouse (often times starting at a specific date in the future)
  • Buying additional Dynamic  Properties
  • Move money between  Accounts if  Account balances drop below certain thresholds
  • One-time or expected future expenses (like college education, weddings, divorce, lawsuit)

In general, I tend to add income before expenses and simple  Rules before complex  Rules.

Later, as part of the analysis stage, I will often go in and add these types of  Rules:

  • Sell  Properties for a number of different reasons
  • Pay off  Properties faster with a number of different strategies
  • Refinance or leverage up  Properties
  • Property manager or self-manage
  • Nomad™ or 20%/25% down payments when buying
  • Buying annuities
  • Stop working earlier or later
  • Job change with higher or lower income
  • Taking social security at different ages (and different dollar amounts)
  • Earlier/later death of yourself or spouse (stopping certain types of income/expenses earlier/later)
Rather Have Us Help You? If you're looking at the process above and would rather have us help you there are two options.

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